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Technology Stocks : Micron Only Forum

MU 344.97

+5.5%

Jan 9 9:30 AM EST

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To: Knighty Tin who wrote (33315)	5/15/1998 5:50:00 PM
From: DavidG	Read Replies (1) of 53903

Mike, Ok we had a big drop today and I thought we could review the PUT situation. We were discussing MURE and MURF and I chose the MURF. Now I could have bought the MURE at 5/8 and the MURF at 2 3/8. The current prices are on the ask 1 7/16 and 4 3/8 respectively. Now on the surface it looks like I made more money dollarwise with the MURF's (2) vs (13/16) but on a percentage basis the MURE's made 123% to 84% for MURF...which is expected. Also if I invested the same amount of money instead of the same number of contracts than a $5000 investment would have yielded $6150 for MURE's vs a profit of $4200 MURF. So you did much better with MURE's. Now my question is does it always have this discrepancy or are the quotes I had off for that evening since that sometimes happens with CBOE. Also the risk of Out of money puts is higher since they expire worthless more often. MY real interest for PUTs 2 months or more out do I always show this discrepancy b/c maybe it is better to trade out-of-money PUTs than in-money? TIA DavidG

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